Stop Loss Illustration Amibroker AFL Code

In this post, we’ll go through a Stop Loss Illustration Amibroker AFL Code. The AFL code can be downloaded free of cost and imported into Amibroker.

Understanding Stop Loss and Amibroker ApplyStop() Function

A Stop Loss is an order placed with a broker to sell a security when it reaches a certain price. It is a risk management tool that traders use to limit their losses if a trade goes against them. Stop losses can be implemented in different ways, such as as a percentage of the entry price or a multiple of the Average True Range.

Amibroker is a popular technical analysis software that allows traders to develop and backtest trading strategies. The ApplyStop() function in Amibroker is used to apply stop loss orders to a trading strategy. It can be used to apply different types of stop losses, including regular stop losses and trailing stop losses.

The ApplyStop() function takes three arguments: stopType, stopMode, and stopPrice. The stopType argument specifies the type of stop loss to apply, and can be set to either stopTypeLoss for a regular stop loss or stopTypeTrailing for a trailing stop loss. The stopMode argument specifies the mode of the stop loss, and can be set to stopModePercent for a percentage stop loss or stopModePoint for an ATR or trailing stop loss. The stopPrice argument specifies the stop loss condition to use. Check this documentation link for the detailed description of this function.

By using the ApplyStop() function, traders can implement a stop loss order as part of their trading strategy in Amibroker, helping them manage their risk and protect their capital in case of unexpected market movements.

Also Read: All you wanted to know about Stop Loss Strategies

Stop Loss Illustration Amibroker AFL Code Download

Please download the AFL code from this link. It can be readily imported into Amibroker.

AFL Explanation

The code above is written in Amibroker AFL (AmiBroker Formula Language), a proprietary programming language used to create trading systems and custom indicators within Amibroker software.

The first few lines of the code define some inputs and parameters for the strategy. The SetTradeDelays function sets the trade execution delay to zero, meaning that trades will be executed immediately when the entry signal is generated. The SetOption functions set the initial equity, minimum shares to trade, and commission rate.

The strategy itself is defined using the Buy and Sell variables, which are set to true when the MACD indicator crosses above or below its signal line, respectively.

Next, three different types of stop loss are defined: a percentage stop loss, an ATR stop loss, and a trailing stop loss. The stop loss conditions are then defined based on these types, where the percentage stop loss is calculated as a percentage of the entry price, the ATR stop loss is calculated as a multiple of the Average True Range, and the trailing stop loss is calculated as a multiple of the ATR from the highest high of the previous 10 bars.

Finally, the ApplyStop function is used to apply each of these stop loss conditions to the strategy. The first argument to ApplyStop specifies the type of stop loss to apply (stopTypeLoss for a regular stop loss or stopTypeNBar for a trailing stop loss), the second argument specifies the mode of the stop loss (stopModePercent for a percentage stop loss or stopModePoint for an ATR or trailing stop loss), and the third argument specifies the stop loss condition to use.

Overall, this code shows how to implement different types of stop losses in Amibroke

Also Read: Trailing Stop Loss – All you wanted to know about it

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